Energy and Power Subcommittee Continues Examination of Changing Energy Landscape, Grid Reliability, and Affordability

May 9, 2013

WASHINGTON, DC – The Subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), today continued its American Energy Security and Innovation hearing series with a focus on grid reliability challenges that arise from the nation’s shifting energy resource landscape. This hearing built on the subcommittee's March 5 and March 19 hearings on the role of fuel diversity in America’s electricity generation portfolio and gas-electric coordination challenges. With natural gas and renewables playing a greater role in the generation mix, several challenges have been identified as a result of this evolving energy landscape.

“The proportion of electricity we get from coal, natural gas, nuclear, hydroelectric, and non-hydro renewables has remained relatively constant over the last several decades. However, a shift is occurring and what is alarming is how fast the mix has changed during the past few years. And it is this rapid transition that presents a number of pressing concerns that must be addressed in order to ensure a reliable and affordable electricity supply,” said Whitfield.

"This committee is dedicated to ensuring the continued availability of affordable and reliable power to American homes and businesses, all the while protecting jobs in this rapidly changing energy landscape,” said Energy and Commerce Committee Chairman Fred Upton (R-MI). “America’s newfound abundance of natural gas is a blessing, as are technological advancements that make renewables more cost competitive and reliable. Both of these resources should – and will – play an important role in contributing to our energy needs. But we need to take steps to properly and cost-effectively integrate these resources into the electricity portfolio."

Dominion Energy CEO Gary Sypolt explained that the shale gas revolution is providing many benefits for the American people, but cautioned that policy makers must ensure the proper conditions are maintained to continue the availability of affordable and reliable energy. He said, "We must address the obstacles that in some markets may undermine the ability to construct the natural gas infrastructure needed to serve the growing electric generation market. Market rules must be reformed to value investments in reliability and to ensure the ability to recover such costs from those who benefit from reliable electricity.”

John Shelk, President and CEO of the Electric Power Supply Association, added that a one-size-fits-all national approach to reliability will¬¬ not serve the nation well. Instead, he advocated for regional policies that can better adapt to resource changes and capitalize on the capabilities prevalent in different areas of the country. “The electric/gas coordination challenge varies by region and therefore a regional, stakeholder-driven approach with fair and transparent collaboration and communication is preferable to a ‘one-size-fits-all’ top-down federal solution,” said Shelk.

Paul Cicio, President of the Industrial Energy Consumers of America, described the concerns that many manufacturers have about energy reliability and impacts it may have on production costs. “Reliability is an important safety and cost issue. Policy makers should not wait until there is rolling brown outs or black outs to provide oversight of natural gas pipeline capacity reliability,” said Cicio.

Regarding the increased integration of renewables into the electric grid, Dr. Jonathan Lesser, President of Continental Economics, Inc., warned, “Federal and state policies that subsidize development of intermittent generating resources, especially wind generation, reduce the reliability of the power system because of the inherently volatile nature of the output of such resources.”

Whitfield concluded, “The electric sector is changing, but one thing that remains constant is that homeowners, small business owners, manufacturers, and others still need reliable and affordable electricity.”